Papua New Guinea's Attorney General Ano Pala (left) with the man he replaced in the job, Kerenga Kua, who was sacked after fraud squad officers sought to arrest the prime minister. Photo: RNZ Todagia Kelola

Papua New Guinea's Attorney-General and Justice Minister Ano Pala has been taken in for questioning by the anti-fraud police unit in Port Moresby.It's the latest in a series of arrests related to a major fraud case enveloping the office of the prime minister Peter O'Neill.

The anti-fraud unit appears to be a step closer to arresting the Prime Minister, but there's an indefinite wait on a procedural hearing over the warrant.

The unit's Chief Superintendent, Matthew Damaru, said police were patiently dealing with the many legal challenges that have been mounted since 2014 by Peter O'Neill's lawyers to prevent his arrest.

The Attorney-General was charged last year with perverting the course of justice in a legal matter related to the fraud case.

Mr Pala's arrest last night was for alleged misuse of electoral funds.

Yesterday police arrested the Prime Minister's lawyer, Tiffany Twivey, and have charged her with perverting the course of justice, in relation to her actions preventing the arrest of another client, the Secretary of Treasury, Daire Vele.

That arrest stems from the same set of alleged fraudulent payments within PNG's Finance Department that has enveloped the prime minister's office.

Fraud police believe Mr O'Neill played a role in allegedly illegal state payments of around 30 million US dollars to the law firm, Paul Paraka Lawyers.

Supreme Court judge charged

The Supreme Court judge Bernard Sakora has also been arrested and charged with judicial corruption.

He is alleged to have accepted a payment from a lawyer linked to Paraka Lawyers at the time that he presided over the Paraka fraud case, including a stay application on the warrant for Mr O'Neill's arrest, without declaring the interest.However Mr Damaru said Peter O'Neill could not be arrested until a separate case relating to legal fees had been heard by the court.

"And that case prevents us from arresting the Prime Minister," he explained.

"The judge has given them the leave to appeal the decision made by the one-man Supreme Court, so it will depend on when that appeal will be heard and determined, and then we can progress with the Prime Minister's case."

Momentum

When the arrest warrant issue came to a head in 2014, the prime minister moved to dismantle the anti-corruption body, Taskforce Sweep, whose investigations found that Mr O'Neill had played a role in the allegedly illegal payments.

He also replaced the Attorney-General and Police Commissioner.

But the fallout has been hard to suppress, with the new Attorney-General charged with perverting the course of justice, and the replacement police commissioner sentenced to jail for obstructing the arrest warrant on Peter O'Neill.

Since the probe began over two years ago, Matthew Damaru has been the subject of various intimidations, and a brief suspension from his role.

He admitted he was concerned for the welfare of his investigators but was spurred on by his desire to do the right thing in pursuing the matter.

Things have moved quickly and the fraud squad is gathering momentum in its bid to bring this case to finality.

Peter O'Neill has repeatedly maintained his innocence but has refused to go in for police questioning over the matter, claiming the probe is politically motivated.